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High Court Of Calcutta
Ramendra Mohan Datta, Salil Kumar Hazra
ALLIANCE JUTE MILLS CO.LTD. - Appellant
Versus
LALCHAND DHARAMCHAND - Respondent
Appeal 149 Of 1972
Decided On : 07/19/1977
The Court stayed a suit filed under Section 34 of the Arbitration Act, 1940, holding that the arbitration agreement contained in the contract between the parties covered the dispute in question, including a claim for damages for defamation.
Fact of the Case:
The appellant, a company, entered into a contract with the respondent, a jute seller, for the purchase of jute. The contract contained an arbitration clause. A dispute arose between the parties regarding the payment of bills for the jute sold and delivered. The respondent referred the dispute to arbitration. The appellant filed a suit against the respondent and the broker involved in the transaction, seeking a declaration that the respondent had no claim against the appellant, cancellation of the contract and bills, and damages for defamation. The respondent applied for a stay of the suit under Section 34 of the Arbitration Act, 1940.
Finding of the Court:
The Court held that the arbitration agreement contained in the contract between the parties was wide enough to cover the dispute in question, including the claim for damages for defamation. The Court found that the claim for damages for defamation arose out of and was connected with the contract, as it was based on letters written by the respondent to the East India Jute and Hessian Exchange Ltd. in the course of realizing the bills under the contract. The Court also found that the subsequent contract pleaded by the appellant did not expressly supersede the original contract or satisfy or discharge it, and that the dispute regarding the subsequent contract was also covered by the arbitration agreement.
Issues: 1. Whether the arbitration agreement contained in the contract between the parties covered the dispute in question, including the claim for damages for defamation? 2. Whether the subsequent contract pleaded by the appellant superseded the original contract or satisfied or discharged it?
Ratio Decidendi: 1. The arbitration agreement contained in the contract between the parties was wide enough to cover the dispute in question, including the claim for damages for defamation. The claim for damages for defamation arose out of and was connected with the contract, as it was based on letters written by the respondent to the East India Jute and Hessian Exchange Ltd. in the course of realizing the bills under the contract. 2. The subsequent contract pleaded by the appellant did not expressly supersede the original contract or satisfy or discharge it, and the dispute regarding the subsequent contract was also covered by the arbitration agreement.
Final Decision: The Court dismissed the appeal and upheld the stay of the suit under Section 34 of the Arbitration Act, 1940.
( 1 ) THIS appeal has been preferred from the judgment and order of Ghosh, J. D/-10-11-1971 staying the suit filed herein under Section 34 of the Arbitration Act, 1940.
( 2 ) THE facts are that by exchange of a bought and a corresponding sold note both bearing No. RJ-50521 dated March 16, 1968, through the broker R. L. Saraf and Co. , the respondent No. 1 herein, Lalchand Dharamchand sold to the appellant 600 maunds of Agartala Mesta Fibre at the rate of Rs. 38. 50 P. per maund working out at Rs. 103. 15 p. per quintal, delivery on 31st March, 1968, at the buyers mill siding. The said contract between the parties was subject to the terms and conditions of the East India Jute and Hessian Exchange Association Ltd. relating to contracts for jute. The relevant bye-laws of the said Association contained an arbitration clause and the same provided as follows:"17. All matters, questions, disputes, difference and/or claims arising out of and/or concerning and/or in connection with and/or in conseqeunce of or relating to this contract including matters relating to insurance and demurrage whether or not the obligations of either or both parties under this contract be subsisting at the time of such dispute and whether or not this contract has been terminated or purported to be terminated or completed shall be referred to the arbitration in accordance with the provisions for reference to arbitration contained in these bye-laws. . . . . . . . . . . . "
( 3 ) PURSUANT to the said contract the respondent No. 1 delivered certain quantities of mesta to the appellant and submitted bills for an aggregate sum of Rs. 20,319. 37 p. on account of price of the Mesta sold and delivered. The said bills were submitted to the appellant through the said brokers the respondent No. 2 herein in terms of the said agreement. Between June 6 and August 29, 1968 the respondent No. 1 on several occasions demanded payment of the said price from the appellant through the said brokers. The appellant in their turn claimed reduction in price to the extent of an aggregate sum of Rs. 612. 96 p. on account of shortage in weight and undercharges. The appellant submitted their bills in respect of the said shortage and under-charges to the respondent No. 1.
( 4 ) NOT having received the payment in respect of the price of goods sold and delivered in spite of several demands, the respondent No. 1 on 6th Sept. , 1968 wrote to the Forward Market Commission, constituted under Forward Contract Regulations Act, complaining about the non-payment of the aforesaid price by the appellant. The respondent No. 1 by the said letter requested the said Forward Market Commission to direct the appellant to make payment. By another letter dated 18th September, 1968 the respondent No. 1 enquired of the said Forward Market Commission if they wanted to intervene in the matter. Thereafter by another letter dated 27th Sept. , 1958 the respondent No. 1 demanded payment once again and threatened to go to arbitration if the same was not made within three days thereafter.
( 5 ) ON or about 7th Oct. , 1968 the respondent No. 1 referred its claim for the aforesaid price to the arbitration of the Bengal Chamber of Commerce and Industry in accordance with the said arbitration agreement contained in the said contract. On 28th Oct. , 1968 the appellant asked for a fortnight's time from the arbitrator to file its statement. The Bengal Chamber of Commerce and Industry granted them time till 9th November, 1968. On 7th Nov. , 1968, the appellant again asked for a further fortnight's time to file its statement and such prayer was also granted till 19th Nov. , 1968. Thereafter the appellant once again asked for a further fortnight's time to file its statement and the same was granted till 4th December, 1968. On 4th Dec. , 1968 the appellant filed its statement of facts in answer to the claim of the respondent No. 1. The appellant thereupon asked for inspection of the contract and the re
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